5. Imagine there is an economy with pure exchange with two individuals (1 and 2). A,...
5.
Imagine there is an economy with pure exchange with two individuals (1 and 2). A, B and C are three points that belong to the utility possibility frontier (UPF) of the two individuals.
| Points | U1 | U2 |
| A | 2 | 7 |
| B | 5 | 5 |
| C | 7 | 2 |
According to the information of the previous table, is the following statement true or false: "The point D (2,5) belong to the UPF"
Question: True or False
A. true
B False
Explain your answer to the previous question.
6.
Using the information in question 5, if the Social Welfare Function (SWF) of this economy is W= U1+ U2. Which of the points A, B, C or D maximizes the SWF?
In the cell below write the total Social Welfare of the point that maximizes the SWF (a number) and in question 7, write the letter of the point that maximizes the SWF.
7.
Write the letter of the point that maximizes the SWF.
Homework Answers
D (2,5) is not on the UPF. As we can see point B(5,5) that is U1 is 5 and U2 is also 5. Thus, the point D will lie below the UPF.
Point D is inefficient.
False.
6.
| U1 | U2 | SWF | |
|---|---|---|---|
| A | 2 | 7 | 9 |
| B | 5 | 5 | 10 |
| C | 7 | 2 | 9 |
| D | 2 | 5 | 7 |
Point B maximizes the social welfare.
7. B
Please let me know if you have any query. Will be obliged to help you. Thank you.
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5.
Imagine there is an economy with pure exchange with two
individuals (1 and 2). A,...
5. Imagine there is an economy with pure exchange with two individuals (1 and 2). A,...
5. Imagine there is an economy with pure exchange with two
individuals (1 and 2). A, B and C are three points that belong to
the utility possibility frontier (UPF) of the two individuals.
a) According to the information of the previous table, is the
following statement true or false: "The point D (2,5) belong to the
UPF"
b) Please explain why it is true or false.
c) If the Social Welfare Function (SWF) of this economy is W=
U1+...
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c)
information should be sold to the highest bidder.
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the flow of information has minimal impact on market
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5. Imagine there is an economy with pure exchange with two
individuals (1 and 2). A, B and C are three points that belong to
the utility possibility frontier (UPF) of the two individuals.
a) According to the information of the previous table, is the
following statement true or false: "The point D (2,5) belong to the
UPF"
b) Please explain why it is true or false.
c) If the Social Welfare Function (SWF) of this economy is W=
U1+...
I consider an economy with two individuals (1 and 2). A, B, and C are three points that belong to the utility possibility frontier of the economy. The individual utilities (Ul. U2) at the three points are as follows: Pointsul U2 A 4 21 B 8 17 C 14 6 Now consider point D. Pointul U2 D 9 15 a. Does point D lie on the utility possibility frontier? How does the answer change if you know the utility possibility...
sondorcet winner to lose under this rule? Explain. 8. Suppose an economy has two types of people. of the other group have utility of type U2. possibility frontier for this economy. ple. All of one group have utility of type U, and all ype U2. In the table below points AB and clie on the utility Points U, U2 a. Now consider point D, where U1 consider point D, where U, 9 and U, 15. Does point D lie on...
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Economists believe that:
Question 4 options:
a)
making information available to market participants improves
market function.
b)
data is more important to traders than information.
c)
information should be sold to the highest bidder.
d)
the flow of information has minimal impact on market
efficiency.
Question 5 (14 points)
When the individuals who get a good or service are the ones who
desire that product the most, the economy is experiencing:
Question 5 options:
a)
allocative efficiency.
b)
equity.
c)...
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